Electoral Reforms entail transparency over donations

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Wellington, June 27, 2022

Justice Minister Kiri Allan has announced proposals for a package of electoral law amendments, which Parliament is expected to pass in the general election in 2023.

Greater disclosure of political party and candidate financial information (financial statements, donations and loans)

Current Rules

The Electoral Act 1993 sets out the political donations and loans framework.

The key current settings are that (1) political parties are required to report to the Electoral Commission, and publicly disclose, the identity of donors who donate more than $15,000 (per calendar year) (2) Political parties are required to report annually to the Electoral Commission on the donations received each year (3) Political parties are required to report all donations from a single donor that exceed $30,000 (in a rolling 12-month period) to the Electoral Commission within 10 working days of receipt (4) The reporting rules do not distinguish between cash and non-cash/in-kind donations (such as auctions and other fundraising activities) (5) Parties and candidates are not required to report on either the total volume or amount of donations under $1500, if the identity of the donor is known (6) There is no requirement for political parties to disclose or publish their annual financial statements; and (7) There is no requirement for candidates to report loans received to support their election campaign.

The full set of rules are summarised on the Electoral Commission website, which can be found here.

Justice Minister Kiri Allan (Labour Party Photo)

Changes proposed

The Minister is proposing the following changes to the Electoral Act (a) Lowering the public disclosure threshold for donations and contributions to political parties from $15,000 to $5000 (b) Amending the reporting requirements for donations by reducing the threshold from $30,000 to $20,000, and requiring disclosure of donations above this threshold within 10 working days only within a general election year (c) Requiring parties to report non-anonymous donations under $1500 (d) Requiring parties to disclose their financial statements; and (e) Requiring candidates to publicly report loans they received from unregistered lenders to support their campaign.

Together, these changes will increase transparency about candidate loans, party donations, and their overall financial position, while keeping extra compliance costs to a minimum.

Reasons for Review

These changes being proposed are intended to increase the transparency, and reduce the complexity, of the political donations and loans framework in time for the 2023 General Election. This will help increase participation and enhance the delivery of elections.

The Terms of Reference for the Independent Review were announced on 24 May and include the broader issue of funding of political parties and candidates and election expenditure. However, the Independent Review is not expected to report back until the end of 2023.

Further information about the Independent Review can be found here.

Overseas voters

Under the Electoral Act, eligible citizens who are living overseas can vote if they have been in New Zealand within the last three years. Permanent residents can vote if they have been in New Zealand within the past 12 months.

The proposed changes will extend the overseas voter eligibility period to six years for citizens, and to four years for permanent residents. These changes are proposed in response to the Covid-19 travel restrictions that have made it more difficult for voters to return to New Zealand within the current time limits.

Reason for change

This change recognises that many New Zealand citizens and permanent residents have been unable to return to New Zealand over the past two years because of Covid-19 travel restrictions.

As a result, many people are currently no longer eligible to vote in the 2023 General Election.

In its response to the Justice Committee’s report on the 2020 General Election, tabled on 10 May 2022, the Government agreed to consider such a change to uphold the voting rights of overseas voters. The Government response can be found here.

Why is this temporary change?

This is a temporary change to apply for the 2023 General Election only, in light of the Covid-19 travel restrictions that have disrupted international travel for the last two years. Permanent changes to voter eligibility rules can be considered by the Independent Review of electoral law. More information on the Independent Review can be found here.

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